ASIC casts eye over Citrofresh's claims

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The Australian Securities and Investments Commission has
confirmed it was inquiring whether Citrofresh's announcement about
its product's ability to prevent the spread of HIV was a proper
disclosure.

After the Geelong disinfectant maker claimed its product could
kill the HIV and flu viruses on Tuesday last week, shares more than
tripled to 70c before the Australian Stock Exchange asked the
company to disclose further details.

It was revealed this week that two company directors took
advantage of the price spike and sold large parcels of shares at
56.2c and 57.7c for a significant profit on Tuesday last week. The
price slipped back to 35.5c after Citrofresh answered the ASX's
questions on Thursday last week.

ASIC spokeswoman Angela Friend said that although the corporate
regulator was making inquiries, "it's not necessarily a formal
investigation at this stage".

Non-executive director Mathew Walker picked up $577,000 by
selling all 1 million of his shares after the company made its
initial announcement on Tuesday last week. The price he achieved
was the highest at which shares had traded since 2001.

"For a public company director to sell shares is not doing
anything wrong," he said. "I will co-operate fully with the ASIC
investigation. In fact, I welcome it."

After warning the Herald that an article on Thursday
about his share trading had a "sinister influence", he wished to
emphasise that he still held 1 million Citrofresh options
exercisable at 10c each before May 2008.

"Why does a director selling shares make the front pages of your
business section?" he asked. "Clearly, there are inferences and
insinuations that make this article newsworthy."

A company associated with non-executive chairman Ron Gajewski
converted 500,000 options at 25c each on Tuesday last week and sold
430,880 the same day. Mr Gajewski was on annual leave and could not
be reached for comment on Friday.